Final VAT Return Due by July 27... Payment Deadline Extended by Two Months for Businesses Impacted by High Exchange Rates and Young Entrepreneurs

6.92 Million Required to File, Up 130,000 from Last Year

Post-Filing Deadline Analysis to Assess Reporting Accuracy

Payment Deadline Extended to September 28 for 1.03 Million Small Business Owners with Decreased Sales and Others

Individual business owners and corporations engaged in value-added tax (VAT) taxable businesses must file and pay the "2026 First Period Final VAT" by July 27, 2026.

According to the National Tax Service on July 2, the number of taxpayers required to file this period has increased by 130,000 to 6.92 million, compared to 6.79 million during the same period last year. Of these, 5.56 million are individual general taxpayers, and 1.36 million are corporate businesses.

Among simplified VAT taxpayers, 90,000 who are subject to scheduled assessments and have not issued tax invoices must pay the assessed VAT amount by July 27. All simplified taxpayers who issued tax invoices in the first half of this year must file and pay based on their first-half performance. However, among scheduled assessment taxpayers, those whose sales or tax payments in the first half are less than one-third of the previous tax period may file a return, and if they do, the assessed tax will be canceled.

Due to the comprehensive restructuring of simplified VAT exclusion areas in April of this year, business owners who have had their tax type changed (from general to simplified or vice versa) as of July 1 must file their 2026 first period final return using their tax type prior to the change.

The National Tax Service plans to implement tax administration support measures, such as automatically extending payment deadlines, to enhance liquidity for small businesses and others facing difficulties due to persistently high exchange rates and oil prices.

Specifically, the payment deadline will be extended by two months (until September 28) without the need for a separate application for a total of 1,026,000 businesses, including small and medium-sized enterprises (including individual owners) affected by high exchange rates, young entrepreneurs in the early stages of their startups, small business owners whose sales have dropped sharply, and simplified taxpayers subject to scheduled returns (assessment). For businesses not eligible for automatic extension, the National Tax Service will provide maximum support within the legal limits if they apply for an extension due to management difficulties or other reasons.

To support businesses affected by the platform settlement crisis that occurred in 2024, the National Tax Service has taken steps to allow those unable to recover sales proceeds due to the bankruptcy of Wemakeprice and Interpark Commerce to deduct bad debt amounts through VAT adjustment claims. Accordingly, all affected businesses will be individually notified via the Hometax "Filing Assistance Service" and mobile notifications to ensure they do not miss the opportunity to submit adjustment claims.

After the filing deadline, the National Tax Service conducts a thorough analysis and strict verification of those suspected of improper reporting. Recently, with the increase in foreign visitors to South Korea, demand for shared lodging in tourist areas like Seoul and Busan has also risen significantly. As a result, by analyzing information exchanges with overseas tax authorities and foreign currency receipt data, the National Tax Service identified numerous cases of unreported sales by shared lodging operators.

A National Tax Service official stated, "From now on, we will conduct a detailed annual review by analyzing domestic shared lodging operators' sales data (agency sales data) directly submitted by overseas shared lodging platforms. We urge everyone to be careful to avoid additional tax penalties due to omitted reporting." The official added, "The National Tax Service will continue to provide as much assistance material as possible to help businesses report accurately, and will actively work to establish various support measures."

This content was produced with the assistance of AI translation services.